Invest in Arena and Its Anti-obesity Drug
As many as a third of adults in the USA are obese and one in six children shares the problem. Type II diabetes, high blood, pressure, heart failure, and other diseases are worsened by obesity. Now the FDA has approved a new drug, made by Arena Pharmaceuticals, for obesity. The question for investors is if it is worthwhile to invest in Arena and its anti-obesity drug. It certainly would have been a good idea to buy Arena stock, ARNA, on or before mid-day on June 27, 2012. When the FDA approved the drug Arena stock jumped up four dollars a share to the $12 range. For those who might want to invest in Arena Pharmaceuticals and its anti-obesity drug, Belviq, here are some facts to add to your fundamental analysis of the company and its product.
How Does Bleviq Work?
Bleviq, generic name lorcaserin, has properties similar to the body’s chemical neurotransmitter serotonin and suppresses appetite. In studies of one and two years the drug was given to people along with a program of dieting and exercise. It is approved for use in obese people with a body mass index (a weight by height estimate of obesity) of 30 or more. It also approved for those with a body mass index of 27 or more who also have diseases linked to obesity, such as Type II diabetes, hypertension, or high cholesterol. Of the people who took the drug and were counseled regarding diet and exercise forty-seven percent of non-diabetics lost five percent of their weight or more. Of those with diabetes thirty-eight percent lost at least five percent of their initial weight. In each case the amount of weight loss of those taking the pill versus those taking a placebo was statistically significant. Although the drug seems to work for its stated purpose investors will want to consider just how much money this drug will make before deciding that buying ARNA stock is just a matter of picking new winners .
Side Effects and Other Choices
If you invest in Arena and its anti-obesity drug remember that Blevig may cause a potentially lethal serotonin syndrome of agitation, diarrhea, sweating, fever, muscle spasms, and forgetfulness. It may be contraindicated in people taking antidepressants or drugs for migraine.
A new drug, Qnexa, appears to be on its way to FDA approval as well and there are two drugs currently on the market for treating obesity. Their stories are instructive. Olistat prevents the absorption of dietary fat making it effective but causes loose stools making people not want to take it. Phentermine, an appetite suppressant, is related to amphetamine and, as such, is recommended for short term use only.
Because Bleviq may aggravate congestive heart failure the company will need to conduct six post marketing studies to look at this potential problem.
As always with stock investing the investor needs look at cash flow and he needs
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